What you need to know about hazard-informed design

When Hurricanes Milton and Helene made landfall in 2024, their impacts were staggering: over $100 billion in combined property losses, as well as hundreds of fatalities.  

In addition to the devastating loss of life, the storms disrupted businesses and institutions, leaving many without electricity or water for weeks. Areas like the River Arts District in Asheville, a major tourist attraction and backbone of the local economy, were swept away by flood waters. 

These types of events are only becoming more common. According to the National Oceanographic and Atmospheric Administration (NOAA), the U.S. set a record for natural hazard events in 2023, with 28 separate events with losses greater than one billion dollars. 2024 was a close second, with 24 major disasters.

There’s no doubt that the direct and indirect impacts of climate change are creating ever-increasing risks for commercial real estate investors, building owners, and lenders. Insurance costs are rising and post-disaster expenses—repairs, business disruption, and property value loss—are often substantial.

Even those who don’t own property face risks. As power outages and post-hazard repairs limit or prohibit use of their home or place of business for extended periods, tenants may be forced to shoulder the financial burden. With insurers retreating and investors demanding transparency, new disclosure regulations are emerging.

The practices will soon become the norm: LEED Version 5, which will be released this year, will include a prerequisite requiring projects to conduct a Property Resilience Assessment (PRA) to inform sustainable and resilient building design.

"Double materiality"

These disclosures often address “double materiality,” i.e. both transitional risks and physical risks. Transitional risks derive from the impact that a business has on the natural world and the legal and regulatory mechanisms that drive impact reductions: things like carbon pricing, building performance standards, and the emerging field of climate litigation.

Physical risks come from the impacts that nature is having, or will have, on businesses in the form of current natural hazards (hurricanes, floods, etc.) and future climate hazards (sea level rise, extreme heat, etc.).

Internationally, the European Union and other countries are beginning to require businesses to disclose these risks to investors, usually focused on GHG emissions and climate-related financial risks. New regulations in California (SB 253 & SB 261) require similar disclosures for larger companies doing business in the state, regardless of where they are located. Several other states, including New York and Illinois, are poised to adopt comparable regulations.

Businesses subject to these disclosure regulations will need to conduct resilience assessments of their assets. In November of 2024, ASTM International released its new E3429-24 Standard Guide for Property Resilience Assessment (PRA). The PRA guide is a companion to existing standards for property condition assessments and environmental site assessments to support real estate transaction due diligence, but it also provides a standardized three-stage process for resilience assessment in support of physical risk disclosures, pre-development risk reduction planning, and existing facility capital improvement planning. This assessment supports the architect’s standard of care to inform clients about current and future natural hazard and climate risks that may motivate decisions to harden structures and integrate resilience strategies into projects.

Step 1: Conduct a hazard screening. 

The PRA process starts with a hazard screening to identify which current natural hazards and future climate-related hazards pose the greatest threat to a subject property or asset.

In many cases, current and future physical risks due to natural hazards and climate change are very localized, so risks are best assessed at the asset level. A minor difference in topography or location could significantly change the potential impacts from flooding, storm surge, sea level rise, wildfires, or other hazards. Importantly, thorough hazard screening pulls from multiple quality data sources. For example, current FEMA flood maps only address fluvial (riverine) flooding and are based on historic rather than current and future flood risks. Other sources, like Fathom’s global flood maps, cover all flooding risks, fluvial, pluvial (heavy rainfall runoff), and coastal flooding.

Step 2: Assess the site’s vulnerability.  

Once hazards are identified, the second PRA stage assesses the site’s vulnerability, a factor of exposure, sensitivity, and adaptive capacity. These are influenced by the configuration of the asset and the equipment and infrastructure that serve it, as well as the occupancy and uses of the facility. For example, an oceanfront tower has greater exposure to hurricane winds and storm surge than a low profile building a short distance inland. Similarly, an office building where tenants have a workforce equipped for remote work, may have low sensitivity and high adaptive capacity, while an assisted living facility with elderly and infirm residents in ground floor rooms may have high sensitivity and low adaptive capacity. 

Step 3: Identify physical and operational resilience measures to mitigate risks.  

Based on the hazards and vulnerabilities revealed, the third PRA stage focuses on the identification of physical and operational resilience measures to mitigate risks. Architects, engineers, and hazard-specific experts can identify practical resilience measures and integrate them into a capital and operational improvement plan. This could include:  

• Choosing between wet floodproofing or dry floodproofing with permanent or deployable flood barriers  
• Selecting wind-resilient roofing systems and impact-resistant glass in high wind hazard zones 
• Adding high-efficiency filters and special ventilation operating modes for wildfire smoke mitigation 
• Sizing on-site renewable energy and back-up energy generation and storage  

For new construction and major renovation projects, the PRA informs design and engineering requirements to create resilient buildings from inception.

Risk mitigation measures can provide a basis to negotiate favorable insurance rates or can be a selling point to attract buyers and tenants.  

Resilience measures, like on-site energy generation and storage to provide back-up power for continuity of operations or thermal enclosure improvements to increase extreme heat resilience, will also reduce utility costs and cut GHG emissions, providing on-going sustainability benefits.  

Project budgets are always limited. A PRA helps design teams to target resilience investments strategically. Businesses, institutions, and governments need to simultaneously address both mitigation of climate impacts through GHG emission reduction, and adaptation to current and future climate-related hazards though asset-level resilience investments. Assessing and addressing climate-related financial risks is becoming a legal requirement for many companies and an expectation of investors, insurance companies, and regulators.  

Alan Scott, FAIA, is an architect and consultant with over 36 years of experience in sustainable building design. He is Director of Sustainability with Intertek Building Science Solutions in Portland, Ore.